The findings of a new Self-Managed Super Fund Professionals’ Association (SPAA) adviser survey shows SMSF professionals are strongly behind policy measures to raise professional standards and the quality of financial advice. The findings are not a surprise, as SPAA has long been an advocate of high professional advice standards in the SMSF sector.
Our survey of more than 300 SMSF professionals, including accountants and financial planners, took place during the recent SPAA Technical Conferences and reflected strong support for SMSF/Australian Artists Association guidelines on ownership of artwork; a restricted licence for accountants who advise on SMSFs; and registration of SMSF auditors by ASIC.
The survey findings also confirmed that many SMSF practices have already embraced the proposed new fee-for-service regime (ahead of a Government plan to ban commissions from July 1, 2012) with only 29 per cent of respondents stating that the Future of Finance Advice reforms would represent a significant change to their businesses.
SMSF professionals also backed the raising of adviser competency standards through the proposed Future of Financial Advice reforms (93 per cent), while 60 per cent of respondents agreed SMSF auditors should be registered with ASIC.
As a best practice measure, 93 per cent of our respondents said fee-for-service should be agreed with the client in advance while 79 per cent said differ- ent charging regimes should apply for different types of advice. Interestingly, more than three-quarters (79 per cent) of respondents said advisers should be able to charge upfront fees from clients’ investment funds with the agreement and direction of the client. However, respondents rejected a model that involved charging all fees on an hourly basis only, with 73 per cent against.
Summing up, SMSF professionals want a choice of remuneration methods agreed to by the client in advance. SPAA also supports this model, while opposing embedded fee arrangements.
On the Government proposal to remove the current “accountants’ exemption” for advice on establishment of an SMSF, less than half (43 per cent) of our respondents agreed with this; but more than half (56 per cent) did support a restricted licence model favoured by SPAA, which would provide SMSF professionals with clarity around advice for set-up of a SMSF.
Only one third (33 per cent) of respondents agreed that financial planners should become registered tax agents to provide incidental tax advice. With more than half the survey responses from financial planners, it’s pretty clear that planners see the tax agent measure as a backward and unnecessary step for their businesses. Most of those surveyed favoured a restricted tax agent registration for financial planners, which would cover their ability to provide incidental tax advice.
The Australian Artists Association/SPAA art guidelines were a popular development, with more than 80 per cent of those surveyed believing the guidelines are necessary to ensure members do not derive a personal benefit from the assets of their fund.
These guidelines were designed so that SMSFs could continue to invest in art-works. Only 15 per cent said that the guidelines were too onerous and just under half (47 per cent) of respondents were undecided about the likely impact of the cost of holding artwork and personal use assets in a SMSF.
Given SPAA’s view about the need for higher professional standards, SPAA has been an active contributor to the reviews that have affected the SMSF and broader superannuation sector over the past few years. These include the Superannuation System (Cooper) Review and the Future of Financial Advice reforms. Today, SPAA stands ready to work with all parties to provide policy support and solutions.
Separately, I have undertaken to write to some of the key new independent members of Parliament. My purpose was to highlight SMSF issues, like the superannuation contribution caps, which may directly affect their constituents.
Andrea Slattery is chief executive officer of the Self-Managed Super Funds Professionals’ Association of Australia (SPAA)
